Context:
We considering the purchase of an investment property from an elderly family friend who has a terminal illness. The intent is to purchase the property and lease it back to Bob for the remainder of his life (he has been given 1-2 years).
Section 108 of the NSW Residential Tenancies Act deals with the matter of terminating a lease in the event of a tenant's death.
Bob has two adult children who have both been provided with very generous trust funds earlier in life and are now quite wealthy. Bob has a tenuous relationship with both children and plans to "give away" a great deal of his estate to charity, leaving his adult children a modest inheritance.
Bob would like to help us out with the mortgage by (i) paying his rent 6 months in advance, and (ii) leaving any advance rent to us on his death. Bob is also adamant that he does not want his adult children to assume a tenancy over the property following his death, and nor does he want any advance rent going back them. In order to implement this, Bob has requested we include a special condition in the lease as follows:
"The lease shall cease 28 days after the death of the tenant, and any rent paid in advance of the tenant's death shall remain the property of the landlord"
Part (5) of Section 108 of the Act states the following:
"The estate of the deceased tenant is not liable to pay any rent for any period after the legal personal representative gives vacant possession of the residential premises and before the termination date".
Questions:
(1) Would any remaining rent paid in advance be considered part of Bob's "estate" for the purpose of s108(5)?
(2) Would Bob's children have any reasonable legal recourse to recover any rent paid in advance if we have the special conditions of lease included in the signed and witnessed lease?
(3) Would the proposed special condition be seen as reasonable and is it contrary to any statute or law.
We considering the purchase of an investment property from an elderly family friend who has a terminal illness. The intent is to purchase the property and lease it back to Bob for the remainder of his life (he has been given 1-2 years).
Section 108 of the NSW Residential Tenancies Act deals with the matter of terminating a lease in the event of a tenant's death.
Bob has two adult children who have both been provided with very generous trust funds earlier in life and are now quite wealthy. Bob has a tenuous relationship with both children and plans to "give away" a great deal of his estate to charity, leaving his adult children a modest inheritance.
Bob would like to help us out with the mortgage by (i) paying his rent 6 months in advance, and (ii) leaving any advance rent to us on his death. Bob is also adamant that he does not want his adult children to assume a tenancy over the property following his death, and nor does he want any advance rent going back them. In order to implement this, Bob has requested we include a special condition in the lease as follows:
"The lease shall cease 28 days after the death of the tenant, and any rent paid in advance of the tenant's death shall remain the property of the landlord"
Part (5) of Section 108 of the Act states the following:
"The estate of the deceased tenant is not liable to pay any rent for any period after the legal personal representative gives vacant possession of the residential premises and before the termination date".
Questions:
(1) Would any remaining rent paid in advance be considered part of Bob's "estate" for the purpose of s108(5)?
(2) Would Bob's children have any reasonable legal recourse to recover any rent paid in advance if we have the special conditions of lease included in the signed and witnessed lease?
(3) Would the proposed special condition be seen as reasonable and is it contrary to any statute or law.
Last edited: